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US manufacturing output rises in February

[WASHINGTON] Strong demand for machinery and steel led US factories to increase production in February, according to Federal Reserve data that suggested a manufacturing slowdown could be easing.

Data released on Wednesday showed US factory output rose 0.2 per cent last month, which was a little stronger than the 0.1 per cent gain expected by economists in a Reuters poll.

Overall industrial output fell 0.5 per cent during the month, dragged lower by sagging oil production and a drop in utilities output.

Manufacturing makes up roughly a tenth of the US economy and has cooled over the last year, hit by slower overseas demand and several months of dollar appreciation. A steep decline in oil prices also hit the US energy sector, reducing demand in some factories.

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But the dollar has weakened recently and the outlook for US domestic demand has improved due to robust job growth. On Wednesday, the dollar was nearly 3 per cent weaker against a basket of currencies on a year-over-year basis.